CH. 2 Systems Integration
ERP systems enable
the organization to standardize and improve its business processes to implement best practices for its industry.
Infrastructure support (IT staff)
Operating and database system (ODBS)
Vertical Silos
Organizations also divided roles in hierarchical layers from strategic planning to management control and operation control. CEOs and Presidents plan long-term strategy, midlevel management focuses on tactical issues and on the execution of organizational policy whereas the lower-level management task is to focus on the day-to-day operations of the company.
Systems integration is
a key issue for an organization for its growth - Management needs to pay close attention to this issue.
4. List the horizontal and vertical levels of systems that exist in organizations.
Vertical Levels of systems à going down Strategic Management Tactical Management Functional Operations Horizontal Levels of systems à going across Human Resources Accounting Finance Marketing Manufacturing MIS
The problem of functional silos gave birth to
business process re-engineering (BPR).
Business process reengineering involves
changing the mindset of the employees in the organization, encouraging and enabling them to do their tasks in a new way.
Systems integration means allowing access to a shared data resource by people from different ________ areas of the organization.
functional
1. What are functional silos and how did they evolve in organizations?
Functional silos evolved when organizations became larger and complex structures. This happens when companies have separations of responsibilities and duties into departments. When departments form in a company they tend to need different things, and then develop their own methods of obtaining their goals, or use methods laid out by higher-ups. Each department operates separately with little or no interaction with each other; they are autonomous and function without the rest of the company.
6.Centralized IT services and support
The IT staff needs to be able to support all applications and platforms with a centralized IT help desk support.
Horizontal Silos
The POSDCORB (Planning, Organizing, Staffing, Directing, Coordinating, Reporting and Budgeting) a Classification of organizations into departments like Accounting and Human Resources
Silos are
basically compartmentalized operating units isolated from their environment.
At the physical level, systems integration means providing seamless connectivity between ________ systems.
heterogeneous
Enterprise Resource Planning (ERP) systems are
integrated, multi-module application software packages designed to serve and support several business functions across an organization.
Drivers for system integration strategy
keeping up with technology exploiting new sales opportunity improving internet efficiency competitive pressures collaborative working exploiting new purchasing opportunities
One step in the systems integration process is to develop a policy on whether older, ________ systems will be supported and maintained.
legacy
The cross-functional organizational structure breaks the functional silos by
opening up the informational flows from one department to another.
Systems integration means
that you allow a heterogeneous (hodgepodge) IS to communicate or integrate and share information (or data) seamlessly with one another.
ERP systems are
typically commercial software packages that facilitate collection and integration of information related to various areas of an organization.
Web-based systems today
use a distributed architecture which allows the sharing of applications and data resources between the client and the server computers.
Steps in Integrating Systems
1. Resource categorization 2.Compliance and standards 3.Legacy systems support 4. Middleware tools 5.Authentication and authorization policies 6.Centralized IT services and support 7.Back-up, recovery, and security 8.Hardware and software standardization
7.Back-up, recovery, and security
A good back-up and recovery system is essential if there is a system failure or a major disaster.
ERP's Role in Physical Integration
Before installing the ERP system, an organization may have to upgrade or install middleware or get rid of their legacy system's hardware and software. Integration is also required at the Data level, Client level, and at the Application level. A good ERP implementation improves operational efficiency with better business processes that focuses on organizational goals rather than on individual departmental goals. Improved efficiency with a paperless flow and electronic data interchange (EDI) or business-to-business (B2B) commerce environment with partners.
3. Compare and contrast centralized, decentralized, and distributed IT architectures. Which do you think is most appropriate for ERP and why?
Centralized systems are usually based on servers, mainframes, and supercomputers, where all the data, software, and resources are stored on the server and are accessed via dumb terminal computers, that is nothing is really stored on the satellite computers. On other hand, decentralized is just the opposite we have multiple small computers with the information and software they need, this gives them full control over what takes place, but may lead to less real time cooperation. Finally, distributed architecture is a combination of both centralized and decentralized architectures with their own applications and tools, accessing data and resources from a shared and very centralized network location. I think the most appropriate system for ERP is the distributed architecture as it blends both centralized and decentralized, and boasts better data consistency and integrity.
staff support (knowledge workers professionals)
Decision support systems (DSS)
3.Legacy systems support
Develop a policy in support of older legacy applications.
2.Compliance and standards
Develop a single sign-on policy because all employees and external partners will need access to an integrated system from anywhere, anytime.
Logical system integration
Develop information systems that allow organizations to share data with all of its stakeholders based on need and authorization.
8.Hardware and software standardization
Develop organization standards and policy on acquisition of new hardware and software which is aligned with organization IT strategy.
8. What is the role of ERP systems in systems integration?
ERP can play a crucial role in systems integration, with Logical systems integration it forces companies to focus on business processes and practices instead of focusing on function alone. Also ERPs allow for co-influence of departments which forcibly removes the Silo concepts from a business. With physical integration ERP systems force companies to focus on upgrading and removing legacy systems, and also forces companies to improve flexibility and fluidity throughout the system.
ERP's Role in Logical Integration
ERP systems require organizations to focus on business process rather than on functions. ERP systems come with built-in processes for a wide variety of common business functions. An ERP system implements best practices via specific built-in steps for processing a customer order in terms of: order entry. routing through departments. communication of output to various parties.
A(n) ________ provides a visual dashboard of strategic information to top level management in real-time
ESS
Limitations of Systems Integration
High Initial Set-up Costs Power and Interdepartmental Conflicts (due to the sharing of information) Long-term and Intangible ROI (Usually several years) Creativity Limitations (Restricts Creativity and Independence)
Benefits of Systems Integration
Increased Revenue and Growth Leveling the Competitive Environment Enhanced Information Visibility Increased Standardization
1.Resource categorization
Instituting IT support for an integrated systems environment is necessary to avoid support and maintenance problems with the integrated system.
5. What is logical integration and how is it different from physical integration?
Logical or Human systems focus on integration of business process and people changes for successful use of system by getting people to share information across functional areas with relative ease. On the other hand, physical systems integration involves building a system architecture that supports many different applications, and get them to work together seamlessly.
information systems that are used for generating reports for mid-level managers are known as:
MIS
9. Summarize the role of management in systems integration.
Management has several integration issues it has to face, first I has to accept that Silos do not work and to begin accepting an integrated information system to store and use data. They also have to understand that Systems Integration has many hidden benefits and many challenges; they will need to look to make improvements while not underestimating the challenges. Likewise they will have to overcome the challenges without missing the very possible and very intangible benefits of an Integrated System. Finally integrated systems also raise many ethical issues, with more electronic transactions taking place, customer information becomes more often a source of information, but that information is private to the customer, and could pose many problems if it were to be released to the public. Such an example would be the TJX incident.
4. Middleware tools
Middleware tools are essential for integration in the short term if existing applications must be used by the organization.
communications and collaborations support (clerical staff)
Office automation system (OAS)
Physical system integration
Provide seamless connectivity between heterogeneous systems.
Implications for Management
Silos do not work. Most organizations lose out in the long-term when information is not shared in real time across the functional boundaries within the company. System integration has many hidden benefits. Allows decision making to be cascaded to all departments Allows employees at lower-levels to make better decisions while interacting with clients or partners. System integration has many challenges. Replacing old hardware and software Working with IT consultants Human challenges, such as impact on IT staff, department heads losing control of data, and rumors of layoffs Systems integration raises many new ethical issues. Possibility of some employees exploiting information for personal advantage and illegal access of information. Remedies can consist of: Develop policies on ethical usage of information. Install proper security software and hardware (like firewalls). Allocate resources for training and education on accessing information.
5.Authentication and authorization policies
Single sign-on policy for application and data access because all employees and external partners will need access to an integrated system from anywhere, anytime.
7. What are the key benefits and limitations of systems integration?
Some of the key benefits to Systems Integration: · The increase of Revenue and Growth · Enhanced information visibility · Standardization of data · Better business practices and · Levels the competitive environment with competitors. Some of the Limitations of Systems Integration: · High initial setup costs · ROI with benefits showing up after long time · Power and Inter-departmental Conflicts.
6. Describe at least five steps involved in systems integration.
Step 1 - Resource categorizing - take inventory of hardware and software and seek vendors that comply with this technology Step 2 - Compliance and standards - check to see what kinds of standards are used for database support JDBC/ODBC Step 3 - Legacy systems support - develop support for older systems Step 4 - Middleware tools - tools that are used to support legacy systems, and are a short term solution to fixing the problem Step 5 - Authentication and authorization Policies - Create standards that users can login and log off to create information protection, to hide sensitive information.
2. What is the relationship between organizational functional silos and IS functional silos?
The relationship between these two types of functional silos is that they both serve the needs of a department, but this is done in two different ways. Traditional functional silos operate as independent units with their required information; changes made within these silos are not propagated to other departments. With a IS functional silo there is no online sharing of data and creates a situation where data has integrity or currency issues.
A silo information system is inefficient, inaccurate, and expensive because
The system creates bottlenecks for everyone and information is not available in real-time.
operational support (line managers and operators)
Transaction support systems (TSS)
ERP systems come with built-in ________ for a variety of functions such as entering a customer order.
processes
A side benefit of integration is that the organization is forced to ________ its hardware, software, and it-policies
standardize